Correlation Between Key Tronic and ScanTech

Can any of the company-specific risk be diversified away by investing in both Key Tronic and ScanTech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Key Tronic and ScanTech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Key Tronic and ScanTech AI Systems, you can compare the effects of market volatilities on Key Tronic and ScanTech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Key Tronic with a short position of ScanTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Key Tronic and ScanTech.

Diversification Opportunities for Key Tronic and ScanTech

0.61

Correlation Coefficient

Key Tronic  ScanTech

Poor diversification

The 3 months correlation between Key and ScanTech is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Key Tronic and ScanTech AI Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanTech AI Systems and Key Tronic is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Key Tronic are associated (or correlated) with ScanTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanTech AI Systems has no effect on the direction of Key Tronic i.e., Key Tronic and ScanTech go up and down completely randomly.

Pair Corralation between Key Tronic and ScanTech

Given the investment horizon of 90 days Key Tronic is expected to generate 0.18 times more return on investment than ScanTech. However, Key Tronic is 5.7 times less risky than ScanTech. It trades about -0.03 of its potential returns per unit of risk. ScanTech AI Systems is currently generating about -0.04 per unit of risk. If you would invest  309.00  in Key Tronic on May 27, 2025 and sell it today you would lose (17.00) from holding Key Tronic or give up 5.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Key Tronic  vs.  ScanTech AI Systems

Key Tronic

Risk-Adjusted Performance

Weakest

Over the last 90 days Key Tronic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Key Tronic is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

ScanTech AI Systems

Risk-Adjusted Performance

Weakest

Over the last 90 days ScanTech AI Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Key Tronic and ScanTech

The main advantage of trading using opposite Key Tronic and ScanTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Key Tronic position performs unexpectedly, ScanTech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ScanTech will offset losses from the drop in ScanTech's long position.

The idea behind Key Tronic and ScanTech AI Systems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.